For the year ended September 15, 2018, Primark, part of the Associated
British Foods Plc said in a preliminary results statement, sales were 6
percent ahead of last year at actual exchange rates and 5.2 percent ahead
at constant currency, driven by increased selling space offset by a 2.1
percent decline in like-for-like sales. Operating profit margin increased
to 11.3 percent from 10.4 percent and, as a consequence, adjusted operating
profit was 13 percent ahead at constant currency. The company added that
Primark performed particularly well in the UK with sales 5.3 percent ahead
of last year, and like-for-like sales growth for the full year was 1.2
percent.

Commenting on the trading update, George Weston, Chief Executive of
Associated British Foods, said in a statement: “This was another year of
progress for the group. We continued to pursue the opportunities to grow
our businesses with a gross investment of 1.2 billion pounds. Strong profit
performances were delivered by each of Primark, grocery, agriculture and
ingredients.”

Highlight's of Primark's full year results

The company added that like-for-like growth was strong in the first half
of the year and was marginally down in the second half in a much weaker
market and which compared to an exceptionally strong second half last year.
Sell-through of the summer range was strong, and, as a result, markdowns
were lower than expected. Early trading of our new autumn/winter range has
been encouraging.

Primark’s store in central Belfast was destroyed by fire in August. Now
the company plans to re-establish a trading presence in Belfast with the
opening of a store in Commonwealth House.

Sales in the Eurozone were 4.7 percent ahead of last year at constant
currency and like-for-like sales fell by 4.7 percent. Sales growth was
achieved in Spain, Portugal and Germany and was especially strong
in France, Belgium and Italy. Adjusting for cannibalisation from new store
openings, the company estimates that the like-for-like decline was 3.6
percent driven by unseasonable weather during three distinct periods this
year, especially in northern Europe, and by soft trading in a weak German
market.

Primark US performed well in the second half of this year with the
company’s ninth store, which opened in Brooklyn in July, trading very
strongly. Existing stores delivered like-for-like growth in the second half
including those stores with reduced selling space, at Freehold and Danbury,
with a consequent benefit to store profitability. The company has signed
agreements for two further stores: American Dream, New Jersey is planned to
open in 2019 and Sawgrass Mills, Florida in 2020. Primark plans to add
further stores in the medium term in the eastern region of the US, which
would be serviced from its existing US warehouse.

Operating profit margin in the second half of the year was well ahead of
the first half, and last year, and was driven by the benefit of the
weakening of the US dollar exchange rate on purchases and by better buying.
Following a very successful sell through of its summer ranges, Primark
said, the level of markdowns in the second half was lower than expected,
although above the unusually low level in the comparative period last year.
These factors together drove the improvement in full year margin from 10.4
percent to 11.3 percent.

Primark to continue expanding retail presence

Looking ahead to next year, forward exchange contracts have been secured
against all merchandise in the first half, and the weaker US dollar
exchange rate for these contracts are expected to deliver a higher first
half margin compared to the first half of this year. Assuming that
purchases for the spring/summer range are secured at current exchange rates
Primark expects a lower second half margin. The full year operating margin
in Primark at this stage is expected to be broadly in line with this year.
However, the company added that exchange rate applicable to purchases in
the second half will be sensitive to sterling exchange rate volatility,
which is likely to arise given a period of intense Brexit negotiations.

Retail selling space increased by a net 0.9 million sq. ft. this year
with 15 net new stores, which brings the total estate to 360 stores.
Selling space increased by a gross 1 million sq. ft. with 16 new stores
added; five stores were added in Germany; four in the UK; two in France and
one each in Portugal, Belgium, Spain, the Netherlands and the US. A small
store at Lisnagelvin, Londonderry, in Northern Ireland was closed and
selling space in the US stores in Freehold and Danbury was reduced.

In the next financial year, Primark plans to add over 1 million sq. ft.
of net additional selling space. Germany, France, Spain and the UK will see
the most space added and overall, with addition of 15 new stores. The
company will move to new premises at Birmingham Pavilions, which, at
160,000 sq. ft., will become our largest store in the whole estate. Other
large new stores to open later in the year will
be: Bordeaux in France; Brussels in Belgium; Utrecht in the Netherlands;
and Milton Keynes in the UK. Its first store in Slovenia will open in 2019
in Ljubljana, taking Primark to its twelfth country and the company has
also signed the lease for its first store in Poland, Warsaw.